V.S. VS. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES (DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5179-16T4

V.S.,

Petitioner-Appellant,

v.

DIVISION OF MEDICAL ASSISTANCE
AND HEALTH SERVICES and BERGEN
COUNTY BOARD OF SOCIAL SERVICES,

Respondents-Respondents.
_________________________________

Submitted June 5, 2018 – Decided June 18, 2018

Before Judges Hoffman and Gilson.

On appeal from the Division of Medical
Assistance and Health Services, Department of
Human Services.

John Pendergast, attorney for appellant.

Gurbir S. Grewal, Attorney General, attorney
for respondent Division of Medical Assistance
and Health Services (Melissa H. Raksa,
Assistant Attorney General, of counsel; Angela
Juneau Bezer, Deputy Attorney General, on the
brief).

PER CURIAM
 Appellant V.S. appeals from a June 12, 2017 final agency

determination by the Director of the Division of Medical Assistance

and Health Services (DMAHS) that denied her application for

Medicaid. We affirm.

I

Appellant is a nursing facility resident; her adult son is

her legal guardian, and she is represented by counsel. On November

25, 2015, appellant's authorized representative submitted a

Medicaid application with the Bergen County Board of Social

Services (BCBSS) on her behalf. The application stated appellant's

primary sources of income were social security and pension

benefits. It also stated she maintained TD Bank checking accounts,

Prudential investment accounts, and had recently sold a single

family home in Saddle Brook.

The BCBSS replied to appellant's application with a notice

requesting information verifying the information included in her

application; among other things, it requested bank statements from

August 2015 through November 2015. The BCBSS denied appellant's

application for failure to produce those documents1 after she

failed to respond to the notice. Appellant requested a hearing,

1
Specifically, the BCBSS denied the application for failure "to
provide [b]ank statements from [August] 2015 to [December] 2015."

2 A-5179-16T4
and subsequently, the matter was transferred to the Office of

Administrative Law.

On April 26, 2017, an administrative law judge (ALJ) issued

an initial decision and concluded the BCBSS properly denied

appellant's Medicaid application due to failure to produce the

requested documentation. Specifically, the ALJ rejected

appellant's arguments that state and federal regulations required

the BCBSS to obtain the documentation itself, rather than requiring

appellant to produce the documents.

On June 12, 2017, DMAHS issued a final agency decision

adopting the ALJ's initial decision. DMAHS found,

The credible evidence in the record
demonstrates that [appellant] failed to
provide the needed information prior to the
January 28, 2017 denial of benefits. Without
this information, [the] BCBSS was unable to
complete its eligibility determination and the
denial was appropriate.

. . . [DMAHS] agree[s] with the ALJ that
there is nothing in the state or federal law
that either excuses [appellant] from her
obligation to obtain documents needed to
verify her eligibility or requires [the] BCBSS
to obtain documents not available through the
[Asset Verification System] . . . .

This appeal followed.

II

An appellate court will not reverse the decision of an

administrative agency unless it is "arbitrary, capricious or

3 A-5179-16T4
unreasonable or . . . not supported by the substantial credible

evidence in the record as a whole." Barrick v. State, 218 N.J.

247, 259 (2014) (quoting In re Stallworth, 208 N.J. 182, 194

(2011)). In cases when an agency head reviews the fact-findings

of an ALJ, a reviewing court must uphold the agency head's findings

even if they are contrary to those of the ALJ, if supported by

substantial credible evidence. In re Silberman, 169 N.J. Super.

243, 255-56 (App. Div. 1979).

New Jersey participates in the federal Medicaid program

pursuant to the New Jersey Medical Assistance and Health Services

Act, N.J.S.A. 30:4D-1 to -19.5. Eligibility for Medicaid in New

Jersey is governed by regulations adopted in accordance with the

authority granted to the Commissioner of the Department of Human

Services. N.J.S.A. 30:4D-7. DMAHS is the agency within the

Department of Human Services that administers the Medicaid

program. N.J.S.A. 30:4D-5; N.J.A.C. 10:49-1.1. Accordingly,

DMAHS is charged with the responsibility for safeguarding the

interest of the New Jersey Medicaid program and its beneficiaries.

N.J.A.C. 10:49-11.1(b). DMAHS is required to manage the State's

Medicaid program in a fiscally responsible manner. See Dougherty

v. Dep't of Human Servs., 91 N.J. 1, 4-5 (1982).

The local county welfare agency (CWA), here the BCBSS,

evaluates Medicaid eligibility. N.J.S.A. 30:4D-7a; N.J.A.C.

4 A-5179-16T4
10:71-2.2(a), -3.15. Eligibility must be established based on the

legal requirements of the program. N.J.A.C. 10:71-3.15. The CWA

must verify the equity value of resources through appropriate and

credible sources. If the applicant's resource statements are

questionable or the identification of resources is incomplete,

"the CWA shall verify the applicant's resource statements through

one or more third parties." N.J.A.C. 10:71-4.1(d)(3).

"The process of establishing eligibility involves a review of

the application for completeness, consistency, and

reasonableness." N.J.A.C. 10:71-2.9. Applicants must provide the

CWA with verifications, which are identified for the applicant.

The applicant must "[a]ssist the CWA in securing evidence that

corroborates his or her statements . . . ." N.J.A.C. 10:71-

2.2(e)(2). The applicant's statements in the application are

evidence and must substantiate the application with "corroborative

information from" pertinent sources. N.J.A.C. 10:71-3.1(b).

The CWA must timely process the application. See 42

U.S.C. § 1396a(a)(3); see also 42 C.F.R. § 435.911(c); N.J.A.C.

10:71-2.3. It must send each applicant written notice of the

agency's decision on his or her application. N.J.A.C. 10:71-8.3.

The CWA should deny applications when the applicant fails to timely

provide verifications. See N.J.A.C. 10:71-2.2(e), -2.9, -3.1(b).

5 A-5179-16T4
 III

On appeal appellant reiterates the arguments she presented to

the ALJ and DMAHS, alleging state and federal law require the

BCBSS to make an initial effort in obtaining the information it

requested from her. We disagree, and affirm substantially for the

reasons stated in the ALJ's initial decision, which DMAHS adopted.

Appellant first argues N.J.A.C. 10:71-2.2, -2.10, -4.1,

and -4.2 require DMAHS "caseworkers to assist Medicaid applicants

in exploring their eligibility" and "conduct [a] collateral

investigation to verify, supplement, or clarify essential

information." Appellant argues the BCBSS failed to contact her

financial institution to verify her resources, and therefore

erroneously denied her application.

Appellant's argument, however, ignores N.J.A.C. 10:71-2.2(e),

which provides:

As a participant in the application process
an applicant shall:

1. Complete, with the assistance from the CWA
if needed, any forms required by the CWA as a
part of the application process;

2. Assist the CWA in securing evidence that
corroborates his or her statements; and

3. Report promptly any change affecting his
or her circumstances.

[(Emphasis added).]

6 A-5179-16T4
DMAHS appropriately interpreted that regulation as requiring

Medicaid applicants to supplement their applications and verify

information CWAs find relevant. Here, the BCBSS requested

appellant provide bank statements, and when she failed to do so,

it correctly denied her application. Moreover, as the ALJ noted,

appellant's Medicaid application explicitly stated she did not

require assistance in its completion. Accordingly, DMAHS did not

act arbitrarily, capriciously, or unreasonably in denying her

application.

Appellant further argues that under 42 C.F.R. § 435.948(b),

the BCBSS had the "affirmative duty to obtain information

regarding" her eligibility. She argues the BCBSS breached that

duty when it failed to obtain her bank information via an

electronic asset verification system (AVS), or by other means.

See 42 U.S.C. § 1396w (requiring states to implement AVS).

42 C.F.R. § 435.948(b) provides: "To the extent that the

information identified in paragraph (a)2 of this section is

2
42 C.F.R. § 435.948(a) requires DMAHS to request financial
eligibility information "from other agencies in the State and
other States and Federal programs":

related to wages, net earnings from self-
employment, unearned income and resources from
the State Wage Information Collection Agency
(SWICA), the Internal Revenue Service (IRS),
the Social Security Administration (SSA), the

7 A-5179-16T4
available through the electronic service established in accordance

with § 435.949 of this subpart, the agency must obtain the

information through such service." 42 C.F.R. § 435.949, entitled

"Verification of information through an electronic service,"

applies to information available from "[f]ederal agencies and

other data sources, including the SSA, the Department of Treasury,

and the Department of Homeland Security."

Here, appellant inaccurately interprets the federal

regulations as requiring the BCBSS to obtain the requisite

supplemental information for her. There is no regulation that

requires agencies to obtain information about a Medicaid

applicant's bank records from an electronic service. See 42 C.F.R.

§ 435.952(c). There is also no regulation that precludes the CWA

from obtaining such information directly from the Medicaid

applicant. Ibid.

As the ALJ noted, "federal laws regarding [DMAHS's] use of the

AVS system do not apply [when] the information needed by the [CWA]

is not on the AVS system and [when] the documents needed by the

agencies administering the State unemployment
compensation laws, the State-administered
supplementary payment programs[,] . . . and
any state program administered under a plan
approved under Titles I, X, XIV, or XVI of the
Act[,and i]nformation related to eligibility
or enrollment from the Supplemental Nutrition
Assistance Program . . . .

8 A-5179-16T4
[CWA] (bank statements) are not obtainable from the AVS system,

but only from the bank itself." Here, the BCBSS requested

appellant provide bank account information — this is not data

available from federal agencies, but rather a private financial

institution.

Accordingly, appellant's arguments lack merit, and DMAHS did

not act arbitrarily or capriciously in denying her Medicaid

application.

Affirmed.

9 A-5179-16T4